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Berlin Workshop Series 2009 49319 Public Disclosure Authorized Spatial Disparities and Development Policy Public Disclosure Authorized Public Disclosure Authorized Edited by Gudrun Kochendörfer-Lucius Public Disclosure Authorized and Boris Pleskovic Spatial Disparities and Development Policy Spatial Disparities and Development Policy Edited by Gudrun Kochendörfer-Lucius and Boris Pleskovic THE WORLD BANK Washington, D.C. © 2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 12 11 10 09 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-7723-9 eISBN: 978-0-8213-7798-7 DOI: 10.1596/978-0-8213-7723-9 ISSN: 1813-9442 Contents ABOUT THIS BOOK ix INTRODUCTION 1 Gudrun Kochendörfer-Lucius and Boris Pleskovic KEYNOTE ADDRESS 9 Indermit Gill KEYNOTE ADDRESS Rethinking Economic Growth in a Globalizing World: An Economic Geography Lens 15 Anthony J. Venables KEYNOTE ADDRESS Africa: Rethinking Growth and Regional Integration 31 Paul Collier Part I: Macro Trends: Spatial Patterns of Economic Activity, Income, and Poverty Spatial Patterns of Population and Economic Activity in the Developing World 39 Steven Haggblade Some Stylized Facts about Rural Poverty and Geography and a Question for Policy 49 Peter Lanjouw Part II: New Economic Geography and the Dynamics of Technological Change—Implications for Less-Developed Countries New Economic Geography and Transportation Policies: The Case of Brazil 61 Eduardo Haddad v VI | CONTENTS Spatial Disparities of Knowledge Absorption, Technological Change, and Prosperity:Theoretical Considerations and Empirical Evidence from China 71 Ingo Liefner Part III: Perspectives: Rural-Urban Transformation— Leading, Lagging, and Interlinking Places Comparative Competitiveness of Agriculture under a Multidimensional Disparity Development Process: A Narrative Analysis of Rural Development Issues in China 83 Mantang Cai Economic Growth in Cities and Urban Networks 91 Frank Van Oort and Philip McCann Part IV: Spatial Disparity and Labor Mobility Can Investment in Human Capital Reduce Regional Disparities? Some Evidence for Spain 109 Ángel de la Fuente Moreno Family Migration: A Vehicle of Child Morbidity in the Informal Settlements of Nairobi City, Kenya? 121 Adama Konseiga Remittances and Their Impact on the Macroeconomic Situation of and Financial Sector Development in the Kyrgyz Republic 143 Roman Mogilevsky and Aziz Atamanov Part V: Africa—Rethinking Growth and Regional Integration Spatial Development Patterns and Policy Responses: A South African Case Study 213 Hassen Mohamed Geography and Regional Cooperation in Africa 221 Wim Naudé Part VI: Learning from Europe’s Efforts at Integration and Convergence The Role and Objectives of European Cohesion Policy 229 Nicola de Michelis Learning from Europe’s Efforts at Integration and Convergence: Lessons for Developing Countries’ Integration Policies 233 Rolf J. Langhammer The Geography of Inequalities in Europe 239 Philippe Martin CONTENTS | VII Part VII: Spatial Policy for Growth and Equity Cohesion and Convergence: Synonyms or Two Different Notions? 259 Grzegorz Gorzelak Regional Development as Self-Organized Converging Growth 265 Peter Nijkamp Africans Need Not Miss Out on the Benefits of Globalization 283 Federico Bonaglia, Nicolas Pinaud, and Lucia Wegner Part VIII: Wrap-Up Discussion and Closing Remarks Implications for WDR 2009 289 Indermit Gill The New World Bank Office in Berlin 291 Claudia von Monbart Appendix 1: Program 293 Appendix 2: Participants 305 About This Book The World Bank and InWEnt (Capacity Building International, Germany) hold a Development Policy Forum every fall in Berlin. This meeting, known as the “Berlin Workshop,” provides a forum for the European research community to contribute its perspectives to early discussions in preparation of the World Bank’s annual World Development Report. The Workshop offers new ideas and distinctive perspectives from outside the World Bank. Participants in the Workshop come from a range of academic, governmental, think-tank, and policy-making institutions in Europe, the United States, and the Russian Federation, as well as from the World Bank and the German development institutions. Conference papers are written by the participants and are reviewed by the editors. Participants’ affiliations identified in this volume are as of the time of the conference, September 30–October 2, 2007. The planning and organization for the Workshop involved a joint effort. We extend our special thanks to Indermit Gill, Director of the World Bank’s World Development Report 2009. We wish to thank Aehyung Kim and Marisela Monoliu Munoz for their advice and suggestions. We also would like to thank the confer- ence coordinators, Marianne Donda, Klaus Krüger, Joachim Müller, and Claudia Schäfer at InWent, and Theresa Bampoe at the World Bank, whose excellent orga- nizational skills kept the workshop on track. Finally, we would like to thank the editorial staff, especially Stuart Tucker and Rick Ludwick, from the Office of the Publisher, and Grit Schmalisch, of InWent for all of their work on this volume. ix Introduction GUDRUN KOCHENDÖRFER-LUCIUS AND BORIS PLESKOVIC The Berlin Workshop Series 2009 presents a selection of papers from meetings held on September 30–October 2, 2007, at the tenth annual Berlin workshop, jointly organized by InWent–Capacity Building International, Germany, and the World Bank in preparation for the World Bank’s World Development Report (WDR) 2009. The workshop brings diverse perspectives from outside the World Bank, providing a forum in which to exchange ideas and engage in debate relevant to development of the WDR. Participants at the workshop discussed challenges and successes pertaining to spatial disparities and development policy. As a country develops, economies of scale tend to result in increasing spatial concentration of industry and services. Agglomeration of economic activities widens the income gap between “leading” and “lagging” subregions within a country and creates a disparity in access to basic public services. Over the course of seven sessions, the workshop explored the inter- actions of government policies and economic geography in addressing spatial dis- parities and development. Macro Trends: Spatial Patterns of Economic Activity, Income, and Poverty Session I highlights questions regarding typical patterns of income disparities within countries and regions. Steven Haggblade describes two parallel movements in economic growth: a spatial shift of population from predominantly rural to predominantly urban settlements and a sectoral shift from agriculture to manufac- turing and services. Historically, humans have inhabited rural areas because of Gudrun Kochendörfer-Lucius is Managing Director of InWEnt – Capacity Building International, Germany. Boris Pleskovic is Research Manager, The World Bank, Washington, D.C. Berlin Workshop Series 2009 © 2009 The International Bank for Reconstruction and Development/The World Bank 1 2 | GUDRUN KOCHENDÖRFER-LUCIUS AND BORIS PLESKOVIC their agricultural or natural resource-based potential, and agriculture requires physically dispersed production. Thus the spatial distribution of rural population corresponds tightly to agroecological potential. During structural transformation, as productivity gains in the economy drive households to diversify consumption into nonfoods, agriculture’s share of total production falls. Because nonfarm production normally benefits from economies of scale, the sectoral shift from agri- culture to manufacturing and services drives the spatial movement of population from rural to urban areas. Given the strong economic links between rural areas and the towns that serve them, rural towns frequently grow quite rapidly in prosperous agricultural zones, while they atrophy in stagnant rural economies. As a result, both the pace and the structure of urbanization depend, in part, on the dynamics under way